Real APR of an MCA offer. The Merchant Cash Advance Calculator takes advance received, factor rate, expected repayment period and returns approximate annual cost (apr) plus total repayment, cost of the advance, daily remittance (22 business days a month). Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
The headline interest rate is only part of what a loan costs: fees, the structure of repayments and how the rate is quoted (flat or reducing) all change the true cost. Compare offers on total interest and effective rate, not on EMI alone. Use the worked example below to check the maths against your own figures.
How the Merchant Cash Advance Calculator works
A factor rate of 1.3 sounds like 30% but the money is repaid daily over a few months, so the annualised cost is usually 60–100% or more. Read the APR before signing.
Worked example
With the example values (advance received of $50,000, factor rate of 1.3, expected repayment period of 9 months), the approximate annual cost (apr) is 72%; total repayment $65,000.00, cost of the advance $15,000.00, daily remittance (22 business days a month) $328.28. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
Assumptions and limits: The APR is an approximation for level daily remittances; actual cost depends on how fast sales repay the advance.
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Frequently Asked Questions
How is approximate annual cost (apr) calculated?
total repayment = advance × factor rate; APR ≈ cost ÷ advance ÷ years, adjusted for the balance falling daily.
Which figures do I need?
Advance received, factor rate, expected repayment period. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
Does the result include fees and charges?
Only where there is a fee input. Processing fees, insurance and prepayment charges add to the true cost; the APR and loan comparison calculators include them.
What assumptions does this calculator make?
The APR is an approximation for level daily remittances; actual cost depends on how fast sales repay the advance.
